Alaska sews up $1.9B Hawaiian merger

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The deal has closed.

Alaska Air Group Inc., the parent company of Alaska Airlines, Wednesday morning announced that it had completed its $1.9 billion acquisition of Hawaiian Holdings, the parent company of Hawaiian Airlines.

Hawaiian shareholders, who approved the merger Feb. 16, are getting $18 a share in cash as part of the deal, which includes $900 million in Hawaiian debt.

Ben Minicucci, CEO of Alaska Air Group, said in a statement, “This is a historic day for Alaska Airlines as we officially join with Hawaiian Airlines. Alaska and Hawaiian share tremendous pride in connecting communities with award-winning service, and we look forward to inviting more guests on board to experience what makes both brands unique.”

Peter Ingram stepped down as Hawaiian Airlines president and CEO after the transaction closed.

Joe Sprague, Alaska Airlines’ regional president of Hawaii/Pacific, took over as Hawaiian Airlines CEO to lead the interim leadership team overseeing Hawaiian’s operations while Alaska pursues a single operating certificate from the Federal Aviation Administration.

He shared his insights with the Honolulu Star-Advertiser about what “Day One” of the merger looks like, and said obtaining the single operating certificate could take another 12 to 18 months.

In the interim, the airlines will continue to operate as separate carriers with no immediate changes to operations. Sprague said integration of the websites, reservation systems and loyalty programs will happen later in the transition.

The goal is for the two airlines eventually to operate as a single carrier with an integrated passenger service system; however, he said both airlines will keep separate brand identities.

“This combination with really bringing the two airlines fully together and then keeping the two customer-facing brands separate and distinct that’s never been done before in the U.S. airline industry,” Sprague said. “There is a lot of planning and discussion that has been underway about how we will bring it together, but it’s so important because we believe strongly in the strength and power of the Hawaiian Airlines brand.”

“It means so much to the people of Hawaii — both residents but also to the employees of Hawaiian Airlines and to the guests that fly Hawaiian Airlines — both those that live here in Hawaii but even people from the continent and elsewhere that love to come to Hawaii,” he said. “Hawaiian Airlines is a super popular brand for those types of travelers so there is much power in that brand and we’re excited about keeping it going.”

Sprague said employees at Hawaiian and Alaska were advised Tuesday that the U.S. Department of Transportation had granted approval for the airlines to combine and operate international routes under one certificate — authorization required to provide air transportation as a merged carrier.

He said the carrier expects to retain and grow Hawaiian’s about 6,000 union workers, and that the airline will work with the labor unions to merge seniority. The combined airline will negotiate new joint collective bargaining agreements with its union workers.

Sprague said come Friday the transition team, which mostly came from Hawaiian’s leadership ranks, will begin meeting with Hawaiian’s 1,400 or so nonbargaining employees to update them on their employment status over the next couple of weeks.

He said redundancies have been identified, but the plan is to retain a vast majority of the 1,400 employees on an interim basis, which could stretch out to a year or longer, or on a long-term permanent basis.

Sprague said a retention award is coming to noncontract employees who stayed until the deal closed, plus 90 days. He said Alaska is asking those whose positions are cut to stay for 90 days. He said those laid off will receive severance and career placement and career counseling services.

He said the combined airline employs 33,000 people across North America, Asia and the Pacific.

Guests will not see any significant changes immediately. As of Wednesday, Alaska’s Mileage Plan and HawaiianMiles retained their full value, and Alaska Lounge members and guests may use the lounge when flying on Hawaiian Airlines.

In the coming weeks, customers may transfer miles between their Alaska and Hawaiian loyalty accounts to redeem travel awards. They’ll also soon be able to buy tickets for flights on both airlines on both websites.

Hawaii residents will receive an email with a link to sign up for a free membership in a new travel program, called Huaka‘i by Hawaiian. Huaka‘i members will receive 10% off one booking per quarter and a free checked bag when traveling interisland.

Huaka‘i members who are Hawaiian Airlines World Elite Mastercard card members will receive 20% off one interisland booking per quarter and their existing credit card benefit of two free checked bags.

In the coming months, customers may earn Mileage Plan or HawaiianMiles miles when flying on either airline. Elite flyers with Alaska or Hawaiian may link accounts so that they have equivalent status on both airlines.

In early 2025, customers may redeem Mileage Plan miles directly on all Hawaiian flights including international destinations, and they may combine Hawaiian flights with Alaska or partner flights when redeeming miles.In mid-2025, Alaska will share more details about a new unified loyalty program, which combines Mileage Plan and HawaiianMiles.

Sprague said he was not sure yet about restructuring airline credit card agreements, which are a part of broader loyalty programs. However, he said he wanted to assure card holders that their miles were safe.

Sprague said the top consumer questions since the merger process began in December 2023 have been whether they could keep their miles and whether Hawaiian Airlines would keep serving POG juice.

“The answer to both questions, is yes, of course,” he said.

Alaska said that the merger means that as of Wednesday Alaska Air Group’s airlines and subsidiary airlines “fly nearly 1,500 daily flights to more than 140 destinations, including 29 international markets in the Americas, Asia, Australia and the South Pacific.”

Sprague said after the merger Alaska remains a distant fifth in size behind the “Big Four” U.S. airlines, including American, Delta, Southwest, and United, which control over 80% of the U.S. market.

“But it does allow us to compete more effectively against those big airlines,” he said. “It expands our global presence with the international flying that Hawaiian Airlines is already doing in Asia and the Pacific. It brings two incredibly good employee groups together. “

Honolulu will become Alaska’s second-largest hub behind Seattle. The network will feed 1,200 destinations available through the oneworld Alliance, which allows mileage holders to use their miles to travel across a variety of brands.

Sprague said the merger with Hawaiian added wide-body aircraft like the 787 and the A330. Alaska Air Group’s airlines and subsidiary airlines now operate a fleet of 350 aircraft, which includes two Boeing 787s, 24 Airbus A330s, 18 Airbus A321neos, 235 Boeing 737s, 19 Boeing 717s, 44 Embraer E175s and eight dedicated freighters (three Boeing 737-700s, two Boeing 737-800s and three Airbus A330s).

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